Month: September 2018

Many of the people who engage the services of a financial planner tend to do so as retirementapproaches. This is natural; retirement is a big step. Here is a financial planning to-do list if you are within 10 years of retirement.

Sock Away as Much as Possible

For many retirement savers, these are the highest income years of their careers. This is the time to contribute the maximum amounts possible to your employer’s retirement plan, IRA accounts and the like. While these contributions will not have the years to compound as those made in your 20s and 30s, every bit helps.

Check Social Security

While there is some discussion as to the future solvency of Social Security, it’s likely that those currently in their 50s will receive their benefits. You can get your statement and check your benefits here. The Social Security Administration has also indicated that they will resume mailing statements, so keep an eye out for yours. I suggest saving them, and always check to ensure that you have received full credit for all of your earnings.

Moreover, it is important to know and understand what your benefits will be if claimed at various ages. If you are married, there are a number of strategies to consider in terms of the timing of claiming your benefits. Here are a pair of good calculators from the websites of Social Security and the AARP.

Gather Info for All Retirement Accounts

These days it is not uncommon for someone to have worked at five or more jobs over the course of their career. This can lead to a number of retirement plans with former employers. If you are married and your spouse works, this number can easily double. This is of course in addition to your Social Security benefits.

Over the years I’ve seen people with old pensions in which they have a vested benefit, old 401(k) plan accounts that they have basically left with their old employer and ignored over the years, multiple IRA accounts and so on. This is a good time to make sure that you have a list of all of these old plans. It’s an even better time to develop a strategy to make sure that old 401(k) and IRAs are consolidated and being properly invested and that your old employer has your current contact information regarding any old pension accounts. While many of these old accounts might be relatively small, if you have several this can add up to real money for your retirement.

Figure In Your Other Financial Resources

This is also a good time to get your arms around your other financial assets that are potentially available to support your retirement lifestyle. Here are a few items that you might have: taxable investment accounts; an annuity; life insurance with cash value; interest in a business and stock options from your employer. If your 401(k) account contains company stock, you might benefit from the use of the Net Unrealized Appreciation (NUA) rules. Additionally, determine if your company offers retiree health insurance. Will you work full or part time during retirement?

It’s not uncommon for companies to offer incentives for longer-tenured employees to take an early retirement. If you are the recipient of such an offer, consider taking it on two counts. First, the offer might be quite financially attractive, and second, if you don’t take the initial offer, the next such offer in most cases is not nearly as lucrative. And make no mistake, after that first offer you likely are “on the list,” so to speak.

Some folks might be lucky enough to be in line for an inheritance from parents or others. I generally urge caution in including this as a retirement asset. Things can happen. Your parents might live longer than expected and the cost of their care could eat away at much of their wealth.

Determine How Much You’ll Need to Support Your Lifestyle

This is the time to start making some choices about how you will live in retirement and, more importantly, to put some dollar figures to this lifestyle. Will you be moving or downsizing your house? Will you be debt-free by the time you hit retirement? Will you have adult children to support?

Another way to say this is to start thinking in terms of a retirement budget.

Do a Retirement Projection

There are many retirement calculators available online, perhaps even through your company’s retirement plan provider. Some are better than others, so do a little checking in terms of the methodology and the underlying assumptions. The better ones are great tools to give you an idea if your plans for retirement are realistic or not.

Most retirement projection tools will ask you to input your retirement plan assets, any pensions, Social Security and any other investments. Based on variables such as your investment allocation and other factors, these programs will give you an idea of how much retirement cash flow your resources might be able to support. While you may not like the answer, it is far better to know you have a potential shortfall as early as possible prior to retirement.

This might be a good point to engage the services of a competent fee-only financial adviser to assist you. Besides their expertise, a qualified adviser can add a detached third-party perspective to your retirement planning.

Think About a Withdrawal Strategy

One of the more complex aspects surrounding retirement can be determining which of your accounts to tap and in what order. Different types of accounts have different income taxconsequences. Traditional IRA account and 401(k) account withdrawals are generally taxed as ordinary income. Roth IRA accounts will generally not be taxed as long as certain rules are followed.

Annuities may be taxed in part or totally, depending upon how you take the money. Taxable investments can qualify for preferential long-term capital gains treatment if certain rules are followed. The point is that the rules can be complex and making poor choices can result in adverse consequences to your financial health in retirement.

Consulting with a qualified tax or financial adviser is a really good idea here, especially if you expect to be in a high tax bracket during retirement.

Stress-Test Your Plan

Even the best-laid plans don’t always go according to plan. Give some thought as to what could go wrong. What happens if you suffer a serious medical setback that prevents you from working until retirement? What if your company decides to lay you off prior to your desired retirement age? Will your plans for retirement still work financially?

The Bottom Line

The 10 years leading up to retirement are the time for investors to get their ducks in a row, so to speak. Get a handle on all of your resources for retirement including Social Security, pensions, retirement accounts and other assets. Determine what you will need to support your lifestyle in retirement and determine if your financial resources will support your lifestyle. If you need the help of a financial professional, get it. A successful retirement takes planning and this time period is crucial to help ensure a successful retirement.

If you’re thinking about moving to and living in Mexico, one of the first things you’ll need to know is how much it will cost to live in Mexico. Understanding the cost of living in another country is essential to planning your move. So much depends on your needs, your lifestyle, and whether you buy or rent your home. Even though it’s cheaper to live in Mexico than other areas of North America, some people still spend as much or more than they do back in the U.S. or Europe. Mexico is a large country. Where you live in Mexico will impact the cost as well. There are big cities, rural areas, popular beach towns, and lots of tourist destinations. Research a particular area you are interested in before making a decision about the whole country.

Get More Purchasing Power for the Peso

Regardless of how much you need to live well in Mexico, you’ll likely get more for your money than in other areas of the world. It isn’t surprising when one considers that the median household income in Mexico is not much more than a tenth of that in the US. In general, just about everything required for your daily living needs costs more in the U.S., Australia, or Europe. Luxury items like brand name products, designer label jeans, and other high-end clothing items or other imported goods are an exception.

Cheaper Groceries and Food

Grocery items are anywhere from 10 to 130 percent lower in Mexico than in other countries. This is mostly because a lot of products are grown there and don’t need to be imported. Living in Mexico gives you greater access to smaller markets and vendors that are often cheaper than going to a big name grocery store. If you’re willing to eat as the Mexicans do at the plentiful little stalls that serve tasty and inexpensive food, you can eat out all the time for the same or less than what it costs to cook at home.

Cheaper Transportation and Housing

Public transportation is almost 200 percent more in the U.S. than in Mexico. Gas prices tend to be cheaper too, and even if you’re living in a smaller town, there are a lot of public transportation options such as commuter vans and buses. Housing is also less expensive by approximately 200 percent as well. Take a look at the recent data compiled by Numbeo, an excellent detailed cost-of-living comparison between Mexico and the U.S. to see the comparisons. Of course, this depends on where in Mexico you live, as there are inexpensive and very expensive areas around the whole country.

Overall Costs You Can Expect

The cheaper cost of living is a key reason more people are finding it tempting to move to Mexico. If you are thinking of making an international move, it’s helpful to review your current lifestyle budget and then try to calculate what a budget living abroad would look like. Remember to consider international flights, if coming back to the U.S. is something you will need to regularly do. Connecting with ex-pats living in the areas you are considering is a helpful resource. They can provide comparable lifestyle budgets and will have knowledge of the area and overall costs.

With miles of sandy beaches and turquoise blue water, beachside living in Mexico has significant advantages. Aside from breathtaking vistas, fun outdoor recreation, and fresh seafood just a catch away, living by the ocean increases mood and overall wellbeing. If you are looking to move and invest in a property in one of Mexico’s gorgeous beach towns, check out these hot locales for serious consideration.

1. CANCÚN

One of Mexico’s most visited towns, Cancún turned from a small fishing village to a well-developed beach town filled with vacation-goers and tourists. If living close to the action appeals to you, Cancun offers plenty of things to do as well as being one of the least expensive beach towns.

2. PLAYA DEL CARMEN (“PLAYA” TO THE LOCALS)

About one hour south of Cancún, Playa del Carmen is situated on Mexico’s Yucatan Peninsula. This hot spot for European and North American vacationers is brimming with trendy restaurants, shopping, and some of Mexico’s best diving and snorkeling. Playa is easily the fastest growing city in Mexico.

3. TULUM

Set along the Caribbean Sea at the center of Mexico’s Ruta Riviera Maya, Tulum offers vast beauty along with affordable seaside living. With rocky coastlines, the Great Mayan Reef, tropical jungles, golfing, and remnants of Mayan temples, Tulum provides plenty of benefits of which to call home.

4. PUERTO PEÑASCO

Over on the west coast, Puerto Peñasco is located in the northwestern corner of the state of Sonora and is the most convenient for commuting to the US. Just over an hour from the border, Puerto Peñasco has been a playground for North Americans for 100 years. With pristine beaches, calm waters, and close proximity to the US, this beach town makes a perfect vacation home. Part of the Sonoran Desert, this region gets plenty of sunshine year-round.

5. PUERTO VALLARTA

Set on Mexico’s central Pacific coast, Puerto Vallarta has been one of Mexico’s most popular resort towns since the 1960’s. With scenic vistas of crystal-blue waters and the Sierra Madre Mountains, Puerto Vallarta excels when it comes to ocean views. Expect to find plenty of condos, high-rise apartments, and a myriad of shops, cafes, bakeries, restaurants, and bars hugging the coastline.

6. CABO SAN LUCAS

Situated on the far southern tip of the Baja California peninsula, a Mexican beach paradise awaits. What was once a quiet fishing village, is now the place to be seen. Touristy, but not tacky, Cabo attracts the elite. With over 320 days of sunshine a year, most activities are centered around the beach, golf courses, and the great outdoors.

As leading real estate group in Mexico, GMP Group specializes in residential and tourism real estate. Contact us to learn more about our current and upcoming projects and investments. Our team of passionate people are experts in real estate development, investment, and construction throughout Mexico. From contemporary beach villas on the shores of the Gulf of Mexico to high-rise condos, GMP can help find you new seaside escape.

Making the decision to retire abroad is a huge step for anyone, even if you’re a seasoned world traveler. Perhaps you’ve spent significant periods of your life overseas exploring various locations, but making the move to another country is entirely different. It can be a daunting prospect, but you should do thorough research rather than making this kind of decision on a whim.

There are several steps you’ll need to take to get ready for your big move, but one of the most important steps is to schedule at least one reconnaissance trip to your chosen country. This will enable you to make a fully informed decision as to whether or not that location is right for you. Here’s what you need to do, and the info you should gather while you’re in your desired retirement location.

Meet as many people as you can

The best place to start on your reconnaissance mission is to get the lowdown from people in the know. People who live and work in your potential destination can provide you with personal accounts of the important aspects of everyday life.

Expats

Some of the most insightful people to arrange to meet prior to arriving will be expats. Ideally they’ll be from the same country as you, and also retired. This way, they’ll know exactly what you need to do before you leave, and once you arrive. You’ll also learn the pros and cons of that particular area, which will help you make your decision.

An easy way to find expats is to search on Facebook or other community sites for expat and retirement groups in that location. You can request to join these groups, and tell the members that you want to meet up while you’re there. Expats tend to be a friendly bunch who are eager to meet new arrivals and help them out. It may also help if you offer to buy them a coffee or a cocktail in exchange for racking their brains.

Locals

While it may be more difficult to set up these meetings in advance, it should be very easy to meet locals when you arrive. This will mean taking the lead and striking up conversations with people wherever you go. Locals might even provide you with alternative views to the expats you meet and mention aspects of living abroad you haven’t yet considered.

If you don’t speak the local language, you’ll be relying on meeting locals who speak English. Visit places that are likely to attract tourists, as most locals who work within this area will speak English. Bars, restaurants, cafes, and shopping centers are all good options.

Ask the right questions

Meeting the right people is only half of it, because you’re also going to have to ask the right questions. What you ask will be personal to you and the destination you’re scoping out, but here a few questions to get started:

“What is the quality of the healthcare system like, and how does it work?”

“What’s the one thing you like least about living here?”

“What do you wish you knew before making the move yourself?”

“Is it necessary to speak the language, or can you get by with some basics?”

“What do you miss most about home?”

Spend some time writing down a list of details that you want to find out before you leave, so you don’t forget while you’re there.

Check out the property market

One of the most important things to get right when you move overseas is to find the right place to call home, so meeting with a few realtors should be a top priority. Keep in mind there’s only so much research you can do online, and it could turn out to be a costly mistake if you purchase or rent a place without seeing it in person beforehand.

Narrow your search down to a few neighborhoods you’re considering. Google Street View is a useful tool to help you get a visual idea of what the areas are like. It’s essential to remain open-minded when you’re looking for property overseas, because depending on where you are, it might be very different than what you’re used to at home.

Once you arrive, arrange some viewings for properties that meet your criteria so you can see exactly what you’ll get for your money. Ask the realtors to explain the process for renting or buying, and write down everything you’ll need to do to complete a transaction.

Treat it as research, not a vacation

Though there’s no set time frame for a reconnaissance visit, you should really stay as long as you can. Between one to three months would be a solid test run for living there, but clearly not everyone will be in a position to do that. Just know that a one-week trip probably isn’t going to be enough time to see everything you need to see, and the less it feels like a vacation, the more you’ll understand what living there is truly like.

Use Airbnb to find a local home for your recon trip, similar to what you might expect when you move there. Staying in a hotel is fine, but it won’t feel like you’re living there, and probably won’t give you the option to cook your own meals. A short-term rental, on the other hand, will most likely have a kitchen, and that way you’ll get a better idea of the cost of groceries.

During our vacations to Isla Mujeres, my wife and I would always meet and talk to gringos that either lived on the island full time or had spent winters in Mexico. After a few years of vacations there, my wife and I decided that Mexico might be a good place to spend part of our eventual retirement time. We knew that summers could be a problem with the heat, rainy season and the potential for a hurricane but it would be nice to be able to spend winters in the warmth of days at 80°F or maybe a little warmer.

As we walked the streets of el Centro we would stop be the real estate office and look at the fliers on the windows. We were quite surprised! Condos were available on the island starting at around $50,000 US and homes that needed a little work were available starting around $100,000 US. We didn’t think that was bad for our own little piece of paradise. This was before the tourist boom on Isla Mujeres and things were still quiet and peaceful most of the time. We never found the island too crowded and what tourist did come to the island kept an array of restaurants open that we could choose from.

We just weren’t ready at that point to jump into that commitment. We needed to give it some more thought. So, every year we would go back and at some point during the vacation we would walk past the real estate office. The first few years the prices didn’t change that much but you could tell the number of tourists was increasing. To make a long story short, we waited and watched the $50k condo go to $150k. At the same time that $100k house went to $500k. Who knew we could have had an investment that would increase 3 to 5 times its original value over less than 10 years.

The prices coupled with the boom in tourism on Isla Mujeres brought us to the conclusion that although Isla is a great place to vacation, it won’t be a place for retirement. We had read somewhere of fishing villages north of Merida that people were starting to move to from Canada mainly, maybe that is somewhere to check out.

Merida is one of the oldest cities in the Americas located in the north western part of the Yucatan peninsula which was originally occupied by the Mayans. The Mayan influence remains today with the names of many locations in the Yucatan being more Mayan than Mexican. Complete with universities, hospitals, casinos, museums, international airport, and shopping malls it has just about anything one would want. The last time I looked, Merida has about 1 million people but is more compact than cities in the U.S. with very narrow streets and smaller lots for houses. The Yucatan coast is about 30 minutes north of Merida.

We spent about 3 years vacationing at different houses along the Yucatan coast. Some areas toward Telchac Puerto, we found were too remote, it would be a 30-45 minute drive to get to a grocery store. Progreso is the largest town in the area and we found it too busy. Progreso is a cruise ship stop, so a couple of days a week Progreso is full of tourist from the cruise ship. We settled on a small fishing village called Chelem.

Driving north from Merida to the coast usually takes you directly into Progreso, Chelem is west of Progreso about 15 minutes. In the village there are approximately 3500 residents with about 300 – 350 being either from the U.S. or Canada (mostly Canadians, eh). During summer high season, the Yucatan coast fills up with Mexicans vacationing during the summer starting from Semana Santa (around our Easter) through the end of August. These vacationers keep a variety of local Mexican restaurants in business. Several ‘gringo’ restaurants are available also to break up the diet from just Mexican food. Winter high season is comprised of snowbirds coming down from the U.S. and Canada to avoid winter.

We did end up buying a house in Chelem. We found a two bedroom, bath and a half house with a swimming pool that we liked. The entire property is enclosed in a wall for privacy. There is a security aspect to the wall but after spending time there security hasn’t been a big issue. When we’re not there, we rent the house out to cover expenses and make some improvements to the house that we want before we decide to retire permanently.

We bought the house in 2015 and only wish we had more time to spend there. So far, we’re very happy with our own little piece of paradise.

There are numerous reasons why you may opt to retire to Huatulco over other places. Here are a few of the top 5 reasons why many retirees have preferred Huatulco, Mexico.

Climate and Nature

People initially consider going south once white winters lose their appeal and they start to feel the pains and aches that tone with the chill; residing in a location that has a normal temperature of about 70 degrees, and not often if ever goes lower than 60 is extremely alluring. Above this, the warm climate permits you to take pleasure in the ocean, coastlines like Oaxaca coast in Mexico, geologically rich nature reserves and much more.

Quality of Life and Prices

The next huge incentive for people to retire to Huatulco is cost; even people who can tolerate (or more often than not avoid) the chilliness, the price of retreat in Canada or the U.S. simply eats away all the savings fast. Whereas other low-priced places can be found, Mexico presents the distinctive benefit of being both reasonably priced and suitably contemporary. Household items, fresh food, dining, and particularly healthcare can be received at much lower costs, however at the utmost level of eminence.

Maybe most notably when you retire to Huatulco, the cost of Mexico condos is where you will get savings initially, and a few of the major savings. Property in Huatulco are effortlessly tailored for retreat and can be found for outstanding costs matching almost any lifestyle and budget.

Cultureand People

For people who are not accustomed to Mexican way of life, you will love it fast. The people in Huatulco are friendly, warm, hospitable, and courteous of their seniors. The food is as well magnificent; additionally, Mexico’s rich customs are characterized by dance, music, art, historic cities, early pyramid sites, and museums from the cultures of their precursors.

Easy move to the US and Canada

Huatulco’s blend of way of life, warm weather and quality of life is distinctive (regardless of frequent misapprehensions, Mexico’s customs and way of life are not widespread all over Latin America.) Furthermore, it is the neighboring state to Canada and the U.S. Reconstruction of transportation and economy has made additional international airports accessible with regular direct flights anywhere in the US, and even past. The trips are extremely inexpensive, making trips back home undemanding, in addition to stopovers from friends and family. A lot of retirees take pleasure in going by road also.

Safety

This is possibly the most astounding to people who have in no way toured Huatulco, because of the news on hostility in Mexico; however, those who vacation and reside in Huatulco will authenticate that for the majority they frequently feel even secure than in their home towns. Drug hostility is cut off to particular parts of the state – regularly down the U.S. border. Homes for sale in Huatulco can be found for incredibly low costs in gated communities, which present extra protection and less travel, however for the reasons mentioned above; a lot of people who want to retire to Huatulco feel extremely contented purchasing a condo or home in the city center or village center regions.

You can plan for it, dream about it and try to visualize it, but there’s no way to tell for sure what retirement will be like for you until after you’ve actually pulled the trigger and left the job. As you contemplate this major life change, remember to prepare for these potential retirement surprises.

The luxury of time. Initially, many retirees keep on doing what they’ve always been doing, except they don’t go to work. There’s more time for shopping, doing home repairs, seeing friends and playing golf. But after a while it begins to sink in: Time is a precious resource. People begin to reflect on their lives, start to say no to activities they really don’t want to do and consciously focus on the important, more purposeful things in their lives.

The need to re-establish some structure. Eventually the fantasy of never again having to punch a time clock or rush to the commuter train gives way to the reality that most people actually like structure in their days. Most retirees develop some sort of new schedule for themselves, whether it’s twice-a-week volunteer work, a semester-long evening class, a regular golf or tennis game with a group of friends or even a part-time paying job.

A search for fulfillment. Work often gives meaning to your life. Some retirees experience a kind of post-work crisis as they search for a new purpose that will give them a sense of fulfillment. Most retirees find the answer in helping other people in one way or another. They may volunteer to help kids with their homework, serve meals to elderly widows and widowers, coach a sports team or help raise their grandchildren.

What happened to my friends? Many retirees are surprised to find that their relationship with old work colleagues fades away as their interests begin to diverge. Other friends may die or move away. However, new friends come along with new activities. And many retirees reconnect with old school pals or long-neglected family members.

Who am I married to? Many couples are surprised to discover new sides to their spouse – sometimes for better, sometimes for worse. Couples often have to redefine their relationship after retirement, remembering why they fell in love with each other in the first place, and realizing that they don’t have to share every interest or spend every minute of the day together.

I don’t need this old house anymore. Some people expect to stay in the family home forever, dreaming of the grandkids coming over to spend hours in the basement looking at old family photos. But the reality is, the grandkids are probably not that interested. The aging house may also need a lot more maintenance than you initially thought. Some retirees find that living in a condo complex or renting an apartment where someone else takes care of maintenance and repairs makes life easier.

Where does the money go? Many retirees are surprised to discover that their money goes a lot further than they thought. Some areas have tax breaks for retirees. Commuting costs are gone, and maybe you don’t need a second car anymore. And now that the kids are on their own, you no longer have to spend so much money on them. Many retirees find that they have extra money to travel, donate to charities, join sports clubs and go to the theater. But be careful. Keep some money in reserve for medical bills, because one common thread among retirees is that health care costs increase as you age.

The biggest surprise of all. Many people wonder why they didn’t retire sooner, because retirement turns out to be even better than they thought it would be.